Economic Development in Africa Report

The Economic Development in Africa report analyses major aspects of Africa´s development problems and policy issues of interest to African countries. It makes policy recommendations for action by African countries themselves and by the international community to overcome the development challenges that the continent faces.

This report provides concrete policy recommendations for African policy makers and their development partners on how to promote sustainable structural transformation in Africa, meaning a sustainable structural transformation that integrates the relative decoupling of natural resource use and environmental impacts from the growth process. The Report also discusses why a strategy of sustainable structural transformation is important for Africa, how strategic priorities can be identified and the role of the national State and the international community in such a strategy.

African countries have been growing at a relatively fast rate since the beginning of the new millennium, which in turn has led to improvements in several areas such as trade, mobilization of government revenue, infrastructure development, and the provision of social services and vice versa. Indeed, over the period 2001–2008, Africa was among the fastest growing regions in the world economy, and it is interesting to note that this improvement in growth performance has been widespread across countries. Despite the progress that has been made by the region over the last decade, the current pattern of growth is neither inclusive nor sustainable. There are various reasons for this.

There are important differences among economists, and also between economists and ecologists, regarding the relationship between economic growth and the environment, the meaning of sustainability, and the policies necessary to make growth consistent with environmental sustainability. Against this backdrop, this chapter examines some conceptual issues critical to understanding different approaches.

The purpose of this chapter is to illustrate selected sectoral policies that can be implemented, at a national level, to promote SST in Africa. The chapter is based on the view elaborated in the last chapter that production sector policies, such as industrial, should be at the heart of efforts to promote relative resource and impact decoupling. The chapter focuses on three sectors: energy, industry and agriculture. These sectors have been identified as critically important for Africa’s structural transformation and sustainable development (New Partnership for Africa’s Development (NEPAD), 2001; AU/NEPAD African Action Plan 2010-2015; ECA, 2011b). Building on last year’s Economic Development in Africa Report, this chapter argues that a green industrial policy should lie at the heart of strategies of SST in Africa. However, given the findings in chapter 2 on the low levels of land-use efficiency, the scale of land productivity losses and the prevalence of energy poverty in Africa, it is also necessary to have policies which promote sustainable agricultural intensification and increased access to energy, particularly sustainable energy. The chapter highlights policies which can promote the development of productive capacities in these areas as well as relative resource and impact decoupling.

Over the past decade, African countries have had a relatively good economic growth performance, with real output growing at an annual average rate of about 5.8 per cent over the period 2002–2008 (AfDB et al., 2011). There are, however, indications that the current pattern of growth in the region may not be sustainable, because it is based on the use of non-renewable or exhaustible natural resources and has not been associated with significant improvements in employment. UNCTAD has consistently argued that structural transformation is necessary to address these current as well as emerging development challenges facing Africa. However, structural transformation is a double-edged sword. While it lays the foundation for high and sustained economic growth, it will also lead to deterioration in environmental quality, unless deliberate action is taken to ensure environmental sustainability during the transformation process.